Centum Investment has booked a Sh1.7 billion gain from its shareholding in UAP Insurance Holdings, following a revaluation of the stock that came with the entry of new shareholders last year and a limited public share sale.
The NSE-listed company’s annual report shows that its stake in UAP Holdings was diluted to 13 per cent from 24 per cent, leading to a re-classification to an unquoted investment from an associate firm.
Centum invested Sh163 million in 2003 for the 24.23 per cent stake in UAP.
“The transfer from associates of Sh1.67 billion is in relation to our holding in UAP Holdings Ltd. This was due to an exercise of convertible debt by some investors in UAP. We, therefore, did not classify the investment as an associate at year-end” said Centum’s finance director Risper Mukoto.
The changes saw the unquoted investments of Centum rise to Sh4.3 billion, being 22.7 per cent of its total assets.
The dilution followed conversion of a Sh4.7 billion debt from Aureos Africa, AfricInvest, and Swedfund International to a 45.7 per cent stake.
The offer had an oversubscription of 130 per cent. UAP has plans to list at the NSE next year, with shareholders currently having the option of trading over the counter.
Centum has been working to restructure its investment mix through geographical and asset diversification.
Last year, the investment firm spent Sh1.78 billion in new acquisitions that involved a 45 per cent shareholding in regional micro-lender Platcorp and a merger of Kisii Bottlers, Mt. Kenya Bottler and Rift Valley Bottlers into an entity called Almasi Beverages.
Geographical expansion has started paying off with investments beyond Kenya and Uganda returning incomes of Sh302 million.
The firm’s investments at NSE rose to Sh2.7 billion from Sh1.7 billion an year earlier. This followed an improvement in the equities market resulting to a Sh835 million revaluation gain for the company and acquisition of shares worth Sh1.1 billion. This was, however, accompanied with a sale of shares worth Sh850 million.
Investment in listed shares saw the company earn dividends worth Sh144 million while the Sh4.3 billion investment in unquoted stocks yielded dividend of Sh127 million.
Improved economic fortunes saw the firm double its profits after tax to Sh2.5 billion from Sh1.2 billion as at end of March 2012.
On Tuesday, the counter closed at Sh23 per unit with 225,300 shares changing hands. The share has been one of the best performing at the stock exchange in the last six months up 75.7 per cent being second only to Access Kenya.
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